The Executive s Guide to Goal Setting
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1 E-Book The Executive s Guide to Goal Setting Build a legacy with effective company-wide goal setting and management
2 Ideas are precious, but they re relatively easy. It s execution that s everything. John Doerr, Partner at Kleiner Perkins Caufield & Byers 2
3 Introduction Once you ve outlined your vision and strategic priorities for the year, how do you orient your people to most effectively execute on them? The traditional approach of cascading objectives throughout an organization in a hierarchical fashion has yielded disappointing results for most organizations: Only Only Only 31.5% 46% 1/2 of workers are engaged at work 1 of companies review or revise goals throughout the year 2 of middle managers can name even one of their company s top priorities 3 A purely top-down, cascaded approach to goals often fails to keep up with the pace of the business. On average, half of senior leaders update their goals throughout the year as business needs change, but only 1 in 3 managers do the same. Even fewer front-line employees update their goals only 1 in 5. 4 A lack of discipline and communication around the goals process results in misalignment, conflicting priorities and frustration from employees. New research suggests companies that revisit and update company goals quarterly are 3.5x more likely to be a high-performing company amongst peers, regardless of industry. 5 Regular organization-wide goal setting helps executives and line-of-business leaders drive operational efficiencies. It also empowers employees and drives a culture of accountability and high performance. When goals are agreed upon at all levels of an organization, they are an ideal way to turn aspirations into tangible commitments and measurable outcomes. 1 Gallup, Stacia Sherman Garr, High-Impact Performance Management: Using Goals to Focus the 21st Century Workforce, Bersin by Deloitte, December Donald Sull, Rebecca Homkes, and Charles Sull, Why Strategy Execution Unravels--and What to Do About It, Harvard Business Review, March Stacia Sherman Garr, High-Impact Performance Management: Using Goals to Focus the 21st Century Workforce, Bersin by Deloitte, December Ibid. 3
4 What is Effective Goal Setting? High-performing companies have moved away from the traditional, annual and top-down approach to goal setting. EXAMPLE 1 EXAMPLE 2 EXAMPLE 3 Specific Meet monthly sales quota Implement new business intelligence tool Raise NPS score Measurable Book a minimum of $2000/month Train entire analytics team Increase current score (10) by at least 5 points Attainable Launched new marketing campaigns to increase leads Created a project plan to ensure a successful implementation Developed new program designed to improve this score Relevant Important financial metric for the company Core operations requirement for analytics team Revenue increases with loyal customers so need to continually raise NPS score Time-bound Before August 31, 2015 Before December 15, 2015 By the end of Q Beyond the basic best practices of S.M.A.R.T goals, executives are investing time and resources to: 1. SET GOALS FREQUENTLY A best practice is to set and publish high-level goals quarterly; however, more regular (monthly or weekly) check-ins with direct reports help ensure top company goals are included in the corporate DNA and project workflows. 2. MAKE GOALS VISIBLE Top company goals are visible to all employees, and any changes or updates to them are shared. Goals and progress are transparent across the organization to eliminate siloing and politics, and all employees goals are open and transparent. 4
5 In addition to improving alignment, employees benefit, employees benefit from sharing their accomplishments with peers and managers. Research has shown that when progress on a goal is shared openly, there is a 78% increase in overall achievement MEASURE PROGRESS Regularly checking goals and updating progress helps employees, managers and executives know what s on track and what s at risk. Real-time measurement allows everyone in the company to make adjustments as priorities shift and quickly take action. 4. DISTINGUISH BETWEEN VISION AND SHORT-TERM EXECUTION Clear connections between the vision (e.g., long-term improvements in customer service and profitability) and short-term goals (e.g., milestones for product development) help employees understand how their work fits into the big picture. 5. PROVIDE FOCUS Best practice is to limit quarterly corporate goals to 3-7 key objectives. This focus provides a common target and clear end-points, but also helps employees push back on certain projects that won t deliver the biggest impact. 6 Dr. Gail Matthews, Goals Research Summary, Dominican University,
6 How Can Lines-of-Business Leaders Set Effective Goals? Traditionally, line-of-business leaders cascade goals from senior management to their functional areas without much cross-functional consideration. To eliminate issues such as siloing and misalignment, line-of-business leaders in high-performing organizations take advantage of transparent goals to: ALIGN TEAM GOALS They coordinate efforts across teams to reduce duplicated efforts. CO-CREATE GOALS WITH EMPLOYEES Instead of a top-down approach, leaders collaborate with employees to set goals and engage in ongoing conversations to understand the dynamics on the front lines. MAINTAIN FOCUS By measuring progress across their teams, leaders quickly identify areas that need attention. ESTABLISH MILESTONES TO MEASURE SUCCESS Leaders monitor progress on a weekly and/or monthly basis to ensure their employees are headed in the right direction, with both the needs of the business and the employees personal development goals in mind. MOTIVATE AND REWARD EMPLOYEE SUCCESSES By highlighting achievements, leaders encourage the right behaviors in a public way. 6
7 Goal Setting Examples for Line-of-Business Leaders ROLE Chief Marketing Officer GOAL Ensure that company meets revenue goal Solidify brand and position as market leader MILESTONES Execute 5 targeted customer acquisition campaigns Generate $50M in pipeline by end of Q1 Acquire 1000 qualified leads or customers by end of Q1 Create and deliver collateral for specific verticals (e.g. manufacturing or retail by February) Convene series of 3 meetings with head of sales by Feb 1, and align on Q2 targets by end of Feb Ensure 3.0 s GTM launch plan and deliverables are executed by launch day Create a unified comms calendar across content, social, press, and launch activities by end of Q1 Hire a new branding agency by end of Q1 Set up 3 analyst briefings and manage analyst requests and submissions by end of Q1 Get 15 media placements and 10 speaking opportunities by end of Q1 ROLE Head of Product GOAL Increase platform engagement by end of Q4 Manage product lifecycle and strategic planning MILESTONES Increase daily active users by 3% Increase weekly active users by 5% Increase monthly active users by 15% Meet with stakeholders from R&D, design, product, engineering and packaging to drive clear and actionable requirements Create a use-case messaging document with marketing Present the vision and roadmap to executive team Implement new process for all Q4 products 7
8 ROLE Head of Sales GOAL Hit company bookings target for Q1 Become a more effective sales machine MILESTONES Secure $10M in bookings by end of Q1 Ensure each sales manager contributes $4M or more in bookings Ensure at least 60% of sales team achieves quota Deliver 40% of our overall bookings via upsell and cross-sell Attend 3 industry events by end of Q1 Launch the energy vertical sales plan by end of Q1 Hire 3 new sales managers by end of Q1 Propose lead territories for 3 new regions given latest lead scoring rules by end of Q1 Ensure that the sales certification program is in place by end of Feb Create new rules of engagement on sales compensation commission by Jan 31st ROLE Director of Support GOAL Create and enable an industry leading support team Maintain support expertise and ensure team has latest and greatest tools MILESTONES Achieve SLA fulfillment greater than 95% by the end of Q1 Reduce escalations by 15% by the end of Q1 Increase NPS score from 30 to 40 by end of Q1 Promote 2 customer support representatives to new customer support manager positions by the end of Q1 Implement Zendesk Embeddables within product s existing help center by end of Q1 Apply for and secure speaking position at UserConf by end of Q1 Submit an article about ROI of strong customer communities to HBR by end of Q1 Initiate live chat pilot programs with LiveChat and ClickDesk by end of February 8
9 How Can Executives Up-Level Their Goal Setting in Practice? If your company is still setting goals the traditional way, you are not alone. In the 2015 Goal Summit survey of more than a hundred businesses, representing 2 million workers, 44% of respondents said they set goals annually. When asked if everyone in their organization knew the top company goals, 55% of respondents answered no. 7 The idea of measuring and updating goals on a weekly or even quarterly cadence may sound impossible. Most executives have long relied on Microsoft Excel or PowerPoint to manage goals, which limits transparency, visibility and progress tracking what makes the process valuable. > > Watch the video For UpWind Solutions CEO, Peter Wells, BetterWorks provides complete transparency. Before BetterWorks, Wells expected that this direct reports were accomplishing their goals but he didn t have any means to really see whether that was true. Now, he does. For UpWind Solutions vice president of technology and engineering, Dave Peachey, BetterWorks provides instant visibility into what contributes to the goals and whether his team is on track or not to meet new product development milestones. 9
10 Leaders at high-performing companies have invested in enterprise goal setting and management software like BetterWorks to improve a formerly complex and manual process. Where Do I Start? Teams that measure progress in metrics (e.g., sales, marketing, customer support, and even human resources teams) are good first candidate groups for enterprise goal setting. Because these teams already work cross-functionally and quantitatively, they often have an easier time embracing milestones and goals than other teams such as engineering that have additional existing processes to accommodate. 10
11 Executives just beginning the journey and those transitioning from manual goal setting processes can develop their organization s goal muscle through education and training, repetition and technology. EDUCATION + TRAINING Regardless of which team is first, educating employees about the importance of goals is a critical first step. Organizations that adopt an education-first approach motivate employees to build goal muscle for personal and professional development. If employees can set goals that are tightly coupled with organizational objectives, they will also be able to set goals that advance the business, and therefore advance their own careers. Investing in training about how to set, measure, assess and adjust goals helps employees develop the skills they need to be effective goal setters. High-performing organizations also often select internal champions who lead by example, serving as goal-setting experts and sources of peer-to-peer feedback about goals. 11
12 REPETITION + TECHNOLOGY As companies progress, they understand that developing a goal muscle that helps them achieve operational excellence and alignment takes time and continual adjustment. They focus on quarterly repetitions where each rep consists of a three-step process: creating goals, logging goal progress and assessing results. They strive to show value early, achieve success and gain support across teams, knowing that goals create and sustain momentum. Most important, they get better at setting and achieving huge goals for the entire organization. Technology like BetterWorks that helps drive engagement can accelerate your organization s ability to develop goal muscle over time. Learn More Goals drive alignment and engagement around the work that means the most to your organization. They connect your company in the ways that your employees actually work top-down, bottom-up and crossfunctionally. They also keep everyone inspired and abreast of priorities in today s rapidly changing global marketplace. Contact BetterWorks to accelerate your organization s adoption of best practices for enterprise goal setting and management. Learn more at 12
13 The following resources can help your team improve goal setting: A Very Influential Goal Masters programs that Professionals (VIP) program include specialized training that employees from any from experts in advanced goal company can join to improve management their goal knowledge OKRs An introduction to Objectives- Key Results (OKRs) e-book Goal Examples Example goal guides for product, engineering, support, sales, marketing and design teams getting started with enterprise goals Free webinars featuring industry experts and discussions related to goals and industry best practices About BetterWorks BetterWorks enterprise software provides the easiest way to set and manage goals. Rooted in Objectives and Key Results (OKRs), it uses Goal Science insights to help high-performing companies get aligned, stay focused on the work that matters and ultimately become more successful. The experienced team comes from innovative companies like Apple, Box, Cisco, Palantir, Salesforce and Yammer. Headquartered in Palo Alto with an office in New York City, BetterWorks is backed by Kleiner Perkins Caufield & Byers and Formation 8. Board members and advisors include thought leaders John Doerr, Laszlo Bock, Jason Lemkin, Aaron Levie and Bing Gordon. For more information visit BetterWorks. All rights reserved. 170 University Ave, Suite A, Palo Alto, CA hello@betterworks.com 13
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